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Is There a Link Between Insurance Claims and Customer Retention?

Most Insurance Agents are well aware of the cost cutting changes made to Claims Handling by most Insurance Companies throughout the years. These changes include the elimination of local claims offices, the reduction or elimination of local field adjusters, and the use of independent Claims Management Vendor Programs. In today’s world, it has become extremely uncommon for an Insurance Claims Representative to visit the customer’s home or business when they suffer a property damage claim.

Fallen tree, Tree on house from storm

But how have these changes affected the Claims Handling experience of your customers? The JD Powers ratings for 2014 disclose some possible answers. Based on their results:

    • only three Insurance companies (14% of those reviewed) were rated as “Above Average” in Claims Handling.
    • A full one third of Insurance Companies reviewed were rated as “Below Average” in Claims Handling.

• While 52% were rated as “Average” in Claims Handling.

As well, according to the Better Business Bureau for our local area, in 2014, complaints related to Insurance Services represented the second leading source of complaints only beat out by complaints against cable companies. The number of complaints received by the Better Business Bureau related to Insurance Services outnumbered those received against Collection Companies, Home Contractors, and Auto Repair facilities. Based on recent surveys conducted by Accenture, 41% of customers who filed an Insurance claim were considering switching Insurance providers.

As a local insurance agent, your customers are your neighbors, friends, business acquaintances, and often relatives. “Average” levels of service may represent adequate levels of service to the Insurance Company, especially considering their drive to sell insurance as a “commodity”. (See our story: Is Insurance a Commodity?), but shouldn’t your customers deserve service that is better than “Average”? As an Insurance Agent, how are these service levels affecting your agency? What are your customers telling others about the level of claims service they can expect if they purchase their insurance from your agency?

Local Insurance Agencies cannot afford to become part of this “commoditized” insurance game. Agencies have the power to bring the value back to insurance by helping their clients break the commodity mentality. Many local agencies are already doing this successfully and growing their businesses through education and using the successful insurance claims experiences of their customers to “sell” the value of their Insurance Agency.

What can you do to improve service for your clients so that your policyholders become your best advocates? Upcoming Pennsylvania Insurance Agent Continuing Education Class entitled “Using The Insurance Claim Process To Your Advantage” (5 CE Credits).

This course will go into much greater detail on this issue and other issues facing Insurance Agents today.

Click Here To Register!

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